What would be the stock price in five years

Assignment Help Financial Management
Reference no: EM131318850

New York Tomes Co. (NYT) recently earned a profit of $2.21 per share and has a P/E ratio of 19.70. The dividend has been growing at a 6.75 percent rate over the past six years.

If this growth rate continues, what would be the stock price in five years. If the P/E ratio remained unchanged? What would the price be if the P/E ration increased to 21 in five years? (Round answers to 2 decimal places)

Reference no: EM131318850

Questions Cloud

What is the future value of the cash flows : Scottie Barnes has invested in an investment that will pay him $5,400, $5,450, $7,225, and $7,500 over the next four years. If his opportunity cost is 10 percent, what is the future value of the cash flows he will receive? (Round to the nearest dolla..
Arguably most risky means of maintaining liquidity : Which of the following is the most efficient yet arguably most risky means of maintaining liquidity? .....and please explain why.
Shares of sirius satellite radio : You would like to buy shares of Sirius Satellite Radio (SIRI). The current ask and bid quotes are $3.98 and $3.95, respectively. You place a market buy order for 540 shares that executes at these quoted prices. How much money did it cost to buy these..
Using all four investment assessment methods : Assume ABC Company has chosen to invest in new manufacturing equipment. The initial cost of the equipment is $1,200,000. The equipment has a useful life of 20 years. The company uses straight-line depreciation. Their tax rate is 30%. Using all four i..
What would be the stock price in five years : New York Tomes Co. (NYT) recently earned a profit of $2.21 per share and has a P/E ratio of 19.70. The dividend has been growing at a 6.75 percent rate over the past six years. If this growth rate continues, what would be the stock price in five year..
Approximately immunized from changes in interest rates : Suppose there are two bonds, a 30-year zero coupon bond and a 2-year zero coupon bond. Currently, the discount rate, y, is 4%. Suppose we are short $ 1000 in par value of the 30-year-zero coupon bond. How much of the 2-year zero coupon bond do we nee..
How many years until the bonds mature : Regatta, Inc., has bonds outstanding that pay an 8.250 percent coupon rate on a $1,000 face value. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. How many years until the bonds mature if the current value of ..
What will be the value of the bond next year : You own a 5 year bond with a face value of $1,000 and a coupon rate of 5 percent with annual payments. The bond is currently worth $810.46. If market interest rates remain unchanged, what will be the value of the bond next year when there are 4 years..
The annual sales figure when evaluating this project : Lee’s currently sells 13,800 motor homes per year at $87,900 each, and 1,100 luxury motor coaches per year at $139,900 each. The company wants to introduce a low-range camper to fill out its product line; it hopes to sell 7,200 of these campers per y..

Reviews

Write a Review

Financial Management Questions & Answers

  What annual rate of return would she have earned

On March 28, 2008, Dover Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay the owner of one of these securities $100,000 on March 28, 2033, but investors would receive nothing un..

  What recent evidence about the performance of medical homes

What recent evidence about the performance of medical homes can you find? What recent evidence about bundled payment programs can you find? What recent evidence about Medicare Advantage HMOs can you find? What recent evidence about the performance of..

  Project net present value if the required rate of return

A project is expected to create operating cash flows of $33,500 a year for three years. The initial cost of the fixed assets is $69,000. These assets will be worthless at the end of the project. An additional $5,000 of net working capital will be req..

  The expected return for the account

In 4 years from today, Steph plans to invest 7,800 dollars in an account that is expected to earn 3.95 percent per year. She also expects to make an investment of X in the same account in 3 year(s) from today. What is X if Steph expects to have 27,60..

  About the interest rate

What interest rate would make it worthwhile to incur a compensating balance of $20,000 in order to get a 1 percent lower interest rate on a 1 year, pure discount loan of $275,000?

  Sell its inventory and then collect the payment

ACME has accounts receivable of $700, sales of $4,200, inventory of $1,200, and cost of goods sold of $3,400. How long does it take ACME to both sell its inventory and then collect the payment?

  Distribution of the ending retirement fund balance

Modify the spread- sheet to include the assumptions that the annual salary increase is triangular with a minimum of 1%, most likely value of 3%, and maximum value of 5%, and that the annual investment return is triangular with minimum of 5%, most lik..

  Commercial banks moved heavily into equipment leasing

Commercial banks moved heavily into equipment leasing during the early 1970s, acting as lessor. One major reason for this invasion of the leasing industry was to gain the benefits of accelerated depreciation and the investment tax credit on leased eq..

  What is the present value of the growing perpetuity

What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate of 7% indefinitely? The rate of interest used to discount the cash flows is 9%. What is the present value of the growing perpet..

  What would be the value of the investment if the money

The treasurer of a major U.S. firm has $36 million to invest for three months. The interest rate in the United States is .24 percent per month. The interest rate in Great Britain is .30 percent per month. The spot exchange rate is £.635, and the thre..

  What is this contract worth as of the end of year

Slaughter Industries just signed a sales contract with a new customer. What is this contract worth as of the end of year 4 if the following payments will be received and the firm earns 6 percent on its savings?

  Saving for the college education of your two children

You are saving for the college education of your two children. They are two years apart in age; one will begin college 14 years from today and the other will begin 16 years from today. You estimate your children’s college expenses to be $38,000 per y..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd